--- title: "The Death of Xin Yi Jia: From 18 Billion Yuan Annual Revenue to Founder Fleeing with 1 Billion Yuan Debt—Who Is to Blame?" description: "As one of the former 'Big Three' supermarkets in Guangdong, Xin Yi Jia seized the opportunity of the industry's booming development but fell before the wave of new retail. Over 22 years, what elegy did it sing for the traditional retail industry? Xin Yi Jia ultimately met one of the most humiliating endings in the wave of supermarket closures. Before foreign supermarkets like Walmart and Carrefour entered China, Xin Yi Jia, which opened its first store in Shenzhen in 1995, was already a representative of discount supermarkets. At its peak, its annual sales reached 18 billion yuan, once ranking alongside China Resources Vanguard and Renrenle as one of Guangdong's supermarket giants." author: "梁楚童@广州" publisher: "New Distribution" email: "zhaobo258@gmail.com" telephone: "+8615854817671" published: "2017-10-24" language: "en" canonical: "https://xinjignxiao.com/en/articles/the-death-of-xin-yi-jia-from-18-billion-yuan-annual-revenue-to-founder-f-6c44dbf2/" markdown: "https://xinjignxiao.com/en/articles/the-death-of-xin-yi-jia-from-18-billion-yuan-annual-revenue-to-founder-f-6c44dbf2.md" original_source: "https://mp.weixin.qq.com/s/-BxPSHTYUNnKa2s0xMojvw" translation: "https://xinjignxiao.com/zh/articles/%E6%96%B0%E4%B8%80%E4%BD%B3%E4%B9%8B%E6%AD%BB-%E4%BB%8E%E5%B9%B4%E6%94%B6180%E4%BA%BF%E5%88%B0%E5%88%9B%E5%A7%8B%E4%BA%BA%E8%B4%9F%E5%80%BA10%E4%BA%BF%E8%B7%91%E8%B7%AF-%E8%B0%81%E6%98%AF%E7%BD%AA%E9%AD%81%E7%A5%B8%E9%A6%96-6c44dbf2.md" attribution: "New Distribution — https://xinjignxiao.com/en/articles/the-death-of-xin-yi-jia-from-18-billion-yuan-annual-revenue-to-founder-f-6c44dbf2/" usage_policy: "https://xinjignxiao.com/ai-policy.txt" --- # The Death of Xin Yi Jia: From 18 Billion Yuan Annual Revenue to Founder Fleeing with 1 Billion Yuan Debt—Who Is to Blame? > As one of the former 'Big Three' supermarkets in Guangdong, Xin Yi Jia seized the opportunity of the industry's booming development but fell before the wave of new retail. Over 22 years, what elegy did it sing for the traditional retail industry? Xin Yi Jia ultimately met one of the most humiliating endings in the wave of supermarket closures. Before foreign supermarkets like Walmart and Carrefour entered China, Xin Yi Jia, which opened its first store in Shenzhen in 1995, was already a representative of discount supermarkets. At its peak, its annual sales reached 18 billion yuan, once ranking alongside China Resources Vanguard and Renrenle as one of Guangdong's supermarket giants. As one of the former 'Big Three' supermarkets in Guangdong, Xin Yi Jia seized the opportunity of the industry's booming development but fell before the wave of new retail. Over 22 years, what elegy did it sing for the traditional retail industry? Xin Yi Jia ultimately met one of the most humiliating endings in the wave of supermarket closures. Before foreign supermarkets like Walmart and Carrefour entered China, Xin Yi Jia, which opened its first store in Shenzhen in 1995, was already a representative of discount supermarkets. At its peak, its annual sales reached 18 billion yuan, once ranking alongside China Resources Vanguard and Renrenle as one of Guangdong's supermarket giants. Initial rapid expansion allowed Xin Yi Jia to open over a hundred stores nationwide, but it also brought supply chain and management loopholes. In 2016, Xin Yi Jia's crisis erupted: severe stock shortages, suppliers demanding payment, and unpaid wages for employees emerged one after another, with the number of stores plummeting to 18. In June 2017, with a reward announcement issued by the Shaoyang County Court in Hunan Province, the news that founder Li Binlan had fled was confirmed. **After bankruptcy liquidation and restructuring, Xin Yi Jia has now been renamed 'Yue Gou Hui,' and Xin Yi Jia has exited the historical stage.** After facing sieges from foreign supermarkets and the strong impact of e-commerce, local supermarket chains collectively faced slowing growth and a wave of store closures. With the advent of the 'new retail' era, online and offline shifted from opposition to integration. Walmart, Yonghui Superstores, and others cooperated with traffic giants, which promoted each other. Facing new opportunities, why did Xin Yi Jia fail to seize them? How did it decline and become eliminated by the times? **Fading After Rapid Expansion** Xin Yi Jia's founder, Li Binlan, was a woman who matched men in ambition and decisiveness. External evaluations of her were mostly that she was bold, decisive, and energetic. ▲Xin Yi Jia founder Li Binlan. In 1995, Li Binlan, just 30 years old, founded Xin Yi Jia, with affordable and down-to-earth prices. During the era when a large number of migrant workers flooded into Shenzhen to start businesses and seek fortunes, Xin Yi Jia quickly won consumers' favor with its good quality and low prices, opening multiple stores in Shenzhen and becoming a leading local enterprise. Xin Yi Jia embodied the 'Shenzhen speed.' In 2000, Li Binlan was not satisfied with the local market and began expanding nationwide, with Hunan as a key region. When Changsha had just one Walmart and one Carrefour, ten Xin Yi Jia stores became the favorite supermarkets for local citizens. In 2003, Xin Yi Jia opened 18 new stores nationwide, becoming the supermarket enterprise in Guangdong with the fastest opening speed, the largest number of stores, and the largest operating area. At that time, Xin Yi Jia had over 50 branches nationwide, with sales reaching over 5 billion yuan, ranking first in comprehensive strength in Guangdong's supermarket industry. In that same year, China Resources Group, after acquiring Shenzhen Wanjia Department Store, renamed its supermarket to 'China Resources Vanguard' and launched a new sunflower logo, re-entering the battlefield. **But the hidden dangers of rapid expansion soon surfaced.** Public data shows that by the end of September 2005, Xin Yi Jia had opened over 70 chain stores across the country, covering 15 provinces, from Liaoning in the north to Hainan in the south. Except for dense layouts in Guangdong and Hunan, most stores in other provinces operated in isolation, with weak chain effects and significant supply chain and logistics pressure. After 2008, Xin Yi Jia encountered a wave of store closures nationwide. According to incomplete statistics, from 2008 to 2013, Xin Yi Jia successively withdrew from Anshan, Dongguan, Zibo, Xi'an, Jiangmen, Yiyang, Xuzhou, Jingmen, and other places. ▲Changes in Xin Yi Jia's stores over the past decade, data from the China Chain Store & Franchise Association. Despite this, Xin Yi Jia's rich assets in Guangdong and Hunan allowed it to 'live on past glory' until 2012, creating an annual sales scale of 18 billion yuan. However, compared with the nearly 17.5 billion yuan in annual sales in 2008 and its 17th place among national commercial chain enterprises, this figure was almost stagnant. At that time, the data of 116 stores nationwide witnessed Xin Yi Jia's most glorious moment. Founder Li Binlan entered the 'Hurun Richest Women in China' list in 2011, ranking 37th with a fortune of 4 billion yuan. According to a report by China Business News that year, HNA Commercial once planned to acquire Xin Yi Jia. After that, Xin Yi Jia's performance and Li Binlan's fortune quickly shrank. **In 2016, Xin Yi Jia's management problems erupted, the capital chain broke, stores closed en masse, and restructuring failed, leading to bankruptcy liquidation.** The Shenzhen Banking Association once took the lead in convening relevant creditor banks to discuss plans to help Xin Yi Jia overcome difficulties, but ultimately failed to save this former giant. ▲Overview of Xin Yi Jia over the past decade, data from the China Chain Store & Franchise Association. **Now, the remaining Xin Yi Jia stores have all been renamed 'Yue Gou Hui,' operated by Shenzhen Dasheng Group, which originally planned to restructure with Xin Yi Jia. Xin Yi Jia has officially gone bankrupt.** On June 21, the announcement by the Changsha Intermediate People's Court of Hunan Province regarding the bankruptcy liquidation case of Hunan Xin Yi Jia Commercial Investment Co., Ltd., selecting administrators through competition, showed that as of March 27, 2017, Hunan Xin Yi Jia Commercial Investment Co., Ltd. had assets of 1.28 billion yuan and liabilities of 1.08 billion yuan. Li Binlan's last appearance as a topic was no longer about her 'iron lady' style or past achievements, but about her fleeing after owing debts. On June 5 this year, the Shaoyang County Court in Hunan issued a notice offering a 10,000 yuan reward for information on her whereabouts, involving a case of 48.5 million yuan plus interest. On July 19, Xin Yi Jia was listed in the business operation exception list by the Shenzhen Market Supervision Administration for failing to submit its annual report within the deadline stipulated in Article 8 of the Interim Regulations on Enterprise Information Disclosure. **Indifferent to E-commerce** Xin Yi Jia caught up with the good times of the retail industry's booming development but failed to seize the opportunity to transform and break through under the impact of e-commerce. Li Botao, executive vice president of Xin Yi Jia Supermarket, said in a speech in 2011 that a differentiated business model is the future path for retail enterprises. To complete an effective business model that meets market demand, retailers need to continuously optimize in areas such as online and offline category division, exploring profit space in cooperation with suppliers, connecting agriculture and commerce, and refined services. But it seems Xin Yi Jia did not do any of what Li Botao mentioned. Since its founding in 1995, Xin Yi Jia's brand image has hardly changed. **In 2006, Xin Yi Jia attempted to readjust its store layout, inviting shoe and clothing chain enterprises like Daphne and Belle to enter, adjusting to a layout of general merchandise on the first floor, a lifestyle supermarket on the second floor, and boutique department store on the third floor. This was Xin Yi Jia's first and only strategic adjustment. But this adjustment did not bring fundamental changes to Xin Yi Jia.** ▲Xin Yi Jia store. After the rise of e-commerce, many supermarkets sought breakthroughs through their own transformation and cooperation with online giants. For example, Yonghui Superstores incubated new formats like Super Species, creating consumption scenarios with a 'retail + dining' model. After reaching a strategic cooperation with JD.com in 2015, Yonghui's fresh products complemented JD.com's online traffic and logistics advantages. In 2016, Yonghui's revenue from fresh and processed business increased by 18.89%, and in the first half of 2017, it increased by 15.17% year-on-year. China Resources Vanguard, on the other hand, laid out high-end sub-brands such as Ole', blt, and V+ boutique supermarkets, targeting core middle-class populations in first- and second-tier cities to meet their health and environmental needs. In addition, China Resources Vanguard recently cooperated with Koubei, Alibaba's local life services platform, to launch electronic membership card services. In contrast, amid the dramatic changes of the times, Xin Yi Jia made no transformation moves. According to an analysis by industry insiders cited by Shenzhen Economic Daily, Xin Yi Jia has rarely innovated in recent years, lagging in combining the internet to develop online sales, e-commerce, and community supermarket layouts. Its physical stores were outdated, and the poor shopping experience was a hard flaw. In its 2016 layoff plan, Xin Yi Jia stated that its capital chain broke due to the macroeconomic situation and banks' withdrawal of loans. The impact of e-commerce on physical retail cannot be ignored. The '2016-17 China Department Store Industry Development Report' released by the China General Chamber of Commerce showed that from the perspective of the retail market competition environment, the erosion of department stores by e-commerce has not stopped, and the diversion from shopping centers is increasingly heavy, continuing to 'intercept' foot traffic from department stores. **But under this external environment, the collectively declining supermarkets were not all defeated. After the concept of 'new retail' was proposed, online and offline were no longer opposing but integrated and symbiotic, and the supermarket retail industry began to recover.** According to statistics from Winshang.com, in the first half of 2017, among 14 listed supermarket companies, 7 saw double growth in revenue and net profit, and 8 turned losses into profits. ▲Performance review of domestic listed supermarket companies in the first half of this year. Xin Yi Jia clearly failed to seize the opportunity. In 2016, Xin Yi Jia was frequently exposed for severe stock shortages. Shelves in its stores were either empty or filled with the same products, with incomplete categories. This was not unrelated to the arrears owed to suppliers. According to Shenzhen Economic Daily, since April 2016, due to tight capital chains and unpaid debts, some suppliers went to Xin Yi Jia's headquarters on Bao'an Park Road in Shenzhen to demand payment. Some suppliers told the media that 80% of Xin Yi Jia's stores were unprofitable. The subsequent restructuring did not stop Xin Yi Jia's retreat. At the end of 2016, Hunan Xin Yi Jia was exposed to laying off 1,200 employees, and all its stores were closed. Xin Yi Jia's downfall should not be attributed to the impact of e-commerce, but rather to its own slow response and poor management. Ye Dong, CEO of Pengyuan Consulting, believes that Xin Yi Jia's failure was due to the huge burden brought by rapid early expansion and a lack of strategic thinking; at the same time, insufficient investment in logistics centers and poor supply chain management capabilities. On the other hand, management lacked innovation capabilities, had poor image management, and lacked brand recognition. Source: Wumian Finance (ID: wumiancaijing) **The 2017 (3rd) FMCG + Internet Conference** will be held in Chongqing in November 2017. The conference will closely focus on the theme 'New Forces, New Ecology,' inviting **1,000+ distributors, 500+ brand owners, 200+ founders of B2B platforms, and 100+ investment and financing institutions** to jointly explore a new chapter of cross-border integration! Click the links below to review the highlights of the first and second FMCG + Internet Conferences: [2016 'FMCG + Internet' Summit Forum]() -END- --- ## Copyright and AI use This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL. Contact: zhaobo258@gmail.com · +86 158 5481 7671